Recording Discount Allowed in Accounting Books

Steps:

• Identify discount allowed as an expense given to customers, reducing cash received.
• In the cash book (three-column), record net cash on debit side and discount on debit side (contra entry).
• Debit the discount allowed account in the ledger as an expense.
• Credit the debtors control account to reduce the outstanding balance.

Why C is correct:

• Discount allowed follows double-entry rules: debited in cash book (receipt adjustment) and discount account (expense per accrual accounting), credited in control account (debtor reduction).

Why the others are wrong:

• A: Incorrectly places entries on credit sides and adds irrelevant control account reference.
• B: Misplaces cash book on credit side, treating it as a payment rather than receipt.
• D: Wrongly credits discount account, ignoring its expense nature.

Final answer: C